Otay rec center contractor sues city

Breach of contract, withheld payments, claims Speedway Construction

A contractor hired to revamp Otay Mesa's Silver Wing Recreation Center is suing the City of San Diego, saying staffers targeted the small minority-owned business and demanded additional work for no pay and impeded progress by conducting unnecessary inspections.

In November of 2011, the city hired Speedway Construction, Inc., to make ADA improvements to the recreation center located on Arey Drive in southern San Diego. In exchange for the improvements, the city — which had certified the company as an “Emerging Local Business Enterprise” — agreed to pay Speedway nearly $400,000.

The relationship between the city and the company allegedly became strained shortly after the project began.

In November 2013, with the project finally complete, Speedway's owners submitted a claim to the city for withheld payments. Their claim, however, was denied, which resulted in the January 8 lawsuit.

"Rather than cooperate in the construction of the Project to foster an environment for [Emerging Local Business Enterprise] success, the city acted exactly to the contrary," reads the legal complaint.

"The city turned the construction of the Project into an adversarial process, refusing to acknowledge responsibility for costs for which it was responsible such as a defective, existing irrigation system at the Project which damaged Speedway's work, caused rework and made performance more difficult.

“Further, the city asked for and received cooperation from Speedway regarding scheduling but refused to honor its commitments to Speedway regarding the phasing of the Project. The city's inspector made the Project even more hostile and adversarial by refusing to accept properly performed work, demanding Speedway perform extra contractual work without compensation, and over-inspecting Speedway's work without justification.

“Additionally, the city has asserted an unjustified claim for liquidated damages in order to coerce Speedway to abandon claims for additional compensation. All of this conduct was inconsistent with the City's policy of supporting and encouraging [Emerging Local Business Enterprise's]."

The company also alleges that the city refused to honor the contract by refusing to pay for the work and forced the company to buy more expensive equipment without agreeing to amend the contract.

In response to the complaints, city officials later refused to recertify the company as an Emerging Local Business Enterprise. Doing so, according to the lawsuit, jeopardizes the future of the business.